• Updates and revisions of the requirements for Safety and Loss

Management Systems, Integrity Management Programs and Engineering Assessments process• Expansion of Annex M to address system control, monitoring and protection for all hydrocarbon pipelines• Clarification of requirements for steam distribution pipelines and high temperature pipelines• Clarification of the “sour service” requirements for gas -free pipeline systems for crude oil, crude of blends, and low vapour pressure condensate• New Annex to provide guidance on the development of qualification of welding procedure specifications• Addition of reference to new standard CSA Z245.30 Field Applied Coatings for Steel Pipe

11Regulation & Compliance

• In Canada, federal and provincial pipeline regulations

incorporate the Z662 Standard by reference, thus giving it the force of law

• Z662 is referenced by oil and gas pipeline and facility regulators,

such as: – the National Energy Board (for pipelines crossing provincial or international borders), and – the provinces of British Columbia, Alberta, Saskatchewan, Manitoba, Quebec, Ontario, New Brunswick and Nova Scotia

• Close to 400,000 km of pipelines operate solely within Alberta and

are regulated by the Alberta Energy Regulator (AER) • Alberta’s pipelines are mostly 168 mm (or 6 inches) outside diameter and smaller that transport raw production from well to central facility and then to a central delivery point • These are commonly referred to as “gathering pipelines” • About 900 different pipeline companies operate pipelines in Alberta • AER works with the oil and gas pipeline industry to continually improve pipeline safety and reliability • AER requires pipeline operators to report all pipeline incidents, including breaks, test failures, and external contact to the pipeline regardless of whether an actual leak occurs

16Regulation & Compliance – Ontario Overview

• Ontario has in the order of 100,000 km of distribution pipelines

• Ontario Ministry of Energy reviews large scale pipeline projects to ensure that they meet the highest environmental and safety standards as well as benefit Ontario’s economy• The Ontario Energy Board advises the Minister of Energy, and approves natural gas rates, pipeline construction and geological formations that are suitable to store natural gas

• TSSA adopts Z662 with additional requirements added in their

• In jurisdictions where adopted by the regulator, pipeline operators

must comply CSA Z662• Regulators proactively inspect and audit operations to identify non- compliances• Table 5.3 of Z662 requires all steel pipe and components to be compliant with either CSA’s respective standards (Z245.12, Steel Flanges, Z245.1, Steel Pipe, Z245.11, Steel Fittings, and Z245.15, Steel Valves) or other equivalent standards• Components are self-declared by the manufacturers for compliance with relevant standards (CSA or otherwise)

18Pipeline Components Attestation Program

• CSA Group is developing an Attestation Program for pipeline

components• Third-party (CSA) involvement in pipeline component certification (attestation at first stage) will improve pipeline safety• With ever-rising environmental awareness and resistance against pipelines the program will add credibility and improve public relations• Currently examining the relevant CSA standard’s requirements towards manufacturing of pipeline components

• Safety and integrity are primary concerns for all stakeholders

• Companies must have a management system to design, construct, operate, and maintain pipelines• Regulators require companies to  develop and implement integrity management programs to identify, manage, monitor, and address any potential hazards associated with each individual pipeline.  monitor their pipelines through testing and inspection to ensure the integrity of the lines is maintained.

CSA Z662-11 Clause 3.1.1

Operating companies shall develop, implement, and maintain a documented safety and loss management system for the pipeline system that provides for the protection of people, the environment, and property.

23 Risk Management – Z662• Risk management is part of a Safety and Loss Management System• Annex A states that the operating company shall develop and implement a risk management process that identifies, assesses, and manages the hazards and associated risks for activities under its control

The risk management process should include the following general approach:(a) define boundaries within which hazards are identified;(b) identify all activities and facilities within the defined boundaries;(c) identify potential hazards, focusing on the potential source of harm;(d) assess and evaluate risks based on the combination of the probability and consequence of a hazardous event occurring;(e) develop control measures that focus on reducing or eliminating the probability or consequence of an incident, or both, to an acceptable level;(f) monitor control methods to ensure that the actions taken are effective and continue to be effective; and(g) conduct a regular review of the risk management cycle to ensure that corrective and preventive actions are employed and that improvements to the risk management process are implemented as required.

24Risk Management – Z662

Annex B – Guidelines for risk assessment of pipelines

This Annex provides guidelines on the application of risk assessment topipelines. These guidelines are intended to(a) identify the role of risk assessment within the context of an overall risk management process;(b) set out standard terminology that is consistent with existing Canadian standards in the field of risk management;(c) identify in general terms the components of the risk assessment process, the associated data requirements, and the requirements for documentation and records; and(d) where applicable, provide reference to methodological guidelines for risk assessment.

25 Risk Management – Z662

 Proposed new requirement for Z662-15 will make it mandatory to

have a risk management process in place:

3.4 Risk management

The operational controls required by Clause 3.1.2(f)(i) shall be in the form of arisk management process that identifies, assesses, and manages the hazardsand associated risks for the life cycle of the pipeline system. The riskmanagement process shall include the following:(a) risk acceptance criteria;(b) risk assessment, including hazard identification, risk analysis, and risk evaluation;(c) risk control;(d) risk monitoring and review;(e) communication; and(f) documentation.Notes:(1) CAN/CSA-ISO 31000 sets out principles and guidelines for risk management.(2) Annex B provides guidance on performing pipeline system risk assessments.